Spain’s Caixabank says layoff plan to cost up to 890 million euros

FILE PHOTO: CaixaBank’s logo is seen at the company’s headquarters in Barcelona, Spain, April 18, 2016. REUTERS/Albert Gea/File Photo

May 8, 2019

MADRID (Reuters) – Spain’s Caixabank said on Wednesday it would incur a charge of up to 890 million euros ($997 million) to pay for a plan to lay off around 6 percent of its Spanish workforce.

Like other European banks, Spanish lenders are struggling to lift earnings as low interest rates squeeze financial markets. They are increasingly focusing on trimming costs and boosting efforts to sell services on digital platforms.

Spain’s third-largest lender said about 60 percent of the 2,023 planned job cuts would take place during the second half of the year and the rest in the second half of 2020. It expects to incur the financial charge in the current quarter.

Assuming a full take-up, the cuts are expected to generate around 190 million euros in annual savings. The bank said the figures were consistent with targets set out in its 2019-2021 strategic plan.

Caixabank last year said it was planning to cut almost a fifth of its branches in Spain over the next three years in a drive to boost profitability while pursuing its digital transformation.

Fellow Spanish lender Santander, the euro zone’s largest lender by market capitalization, is also in negotiations with unions on shutting branches and potential layoffs as part of the integration process with Banco Popular.